The National Bank of Hungary (MNB) surprised the markets on Tuesday by lopping 20 basis points off its policy interest rate to leave it at 2.1 per cent a year, a new record low.
But Gyorgy Matolcsy, central bank governor, said Tuesday’s cut marked the end of the bank’s two-year cutting cycle. Continue reading »
Brazilian inflation broke the upper bound of the government’s target range in the first half of July, reaching an annual rate of 6.51 per cent according to the statistics office IBGE. It looks set to stay high until the country’s elections in October, putting further pressure on the candidacy of Dilma Rousseff, seeking re-election as president.
The half-monthly figures presented by the IBGE are not seasonally adjusted. But Neil Shearing at Capital Economics reckons they show a clear tendency to take annual inflation to 6.6 per cent for the full month, up from 6.5 per cent in June. Continue reading »
** FT News **
* Mistral row dominates EU sanctions talks | François Hollande says the delivery of a second vessel under the €1.2bn contract will depend on Moscow’s attitude to the conflict in Ukraine
* UK to hold inquiry into Litvinenko death | Home secretary Theresa May is to announce an inquiry into the death in London of former Russian agent Alexander Litvinenko Continue reading »
By Mario Pezzini of the OECD
The year 2010 was a turning point. What we didn’t know at the time – but what new data just released have shown us – was that 2010 was the year when the share of non-OECD countries in the global economy surpassed that of OECD countries, at purchasing power parity. The rate of this shift has been remarkable: just 10 years earlier these countries accounted for 40 per cent of the global economy. The shift is being led by China and India, which together account for almost a quarter of the global economy. Continue reading »
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** FT News **
* Photo shows signs of missile hit on MH17 | Three experts confirm a photograph published by the FT over the weekend FT picture shows signs of shrapnel damage consistent with a missile strike
* Europe urged to harden Russia sanctions | UK-led group, including central and eastern European countries, wants to lay groundwork for an escalation to target entire sectors of economy Continue reading »
After what has felt like an endless waiting game, Mexico’s energy reform is finally entering the home straight.
This weekend Senate members approved key bills to govern the new-look hydrocarbons sector, as well as the energy sector and the state utility, CFE, and oil company, Pemex, that will lose their monopolies under the sweeping reform. There is just one section still to be passed. Continue reading »
Kenya’s conservative but fast-growing $7.8bn pension fund industry has just taken a pioneering step. For the first time since the 1990s, a leading Kenyan pension fund is putting its cash into a private equity fund.
The pension fund for Kenya Power and Lighting Company, which has 6,000 workers and $300m under management, will invest $4m with Ascent Capital, a new regional private equity fund that makes its first close this week with $50m and will back companies in Ethiopia, Uganda and Kenya. Continue reading »
** FT News **
* Dutch PM warns Moscow over MH17 access | Mark Rutte says ‘all political, economic and financial options’ are on the table if access to the crash site of the downed airliner does not improve
* Kerry due in Cairo as Gaza death toll mounts | More than 60 Palestinians have been killed and thousands displaced in Gaza’s biggest city in the most intense fighting yet in Israel’s two-week-old offensive Continue reading »
Is one of Latin America’s stars losing some of its shine? Amid worsening terms of trade and expected weaker output in mining and fisheries, Peru’s central bank appears to think so, at least for now.
In its latest quarterly report, the BCRP cut its outlook for GDP growth this year to 4.4 per cent from its previous estimate of 5.5 per cent. Next year’s outlook was also revised downwards, to 6 per cent from 6.7 per cent. Continue reading »
By Taras Kuzio of the University of Alberta
Vladimir Putin, Russia’s president, has tough decisions to make this week that will have a profound impact on his legacy and on Russia’s future. His two choices are both unpalatable for the anti-Ukrainian strategy he has pursued since last November. Then, he led Viktor Yanukovich, Ukraine’s president at the time, to turn away from Europe, supplied weaponry for Ukraine’s security forces used against protesters, occupied Crimea and launched a proxy war to break up Ukraine by detaching the so-called “New Russia” (Tsarist Russia’s name for east Ukraine). Continue reading »
** FT News **
* Putin handed ultimatum over crash site | Britain, France and Germany warn Russian leader he faces further sanctions this week unless he ensures air accident investigators have full access to crash site
* Israel intensifies ground war in Gaza | About 60 Palestinians killed and thousands displaced in Gaza’s biggest city in the most intense fighting yet in Israel’s two-week old anti-Hamas war Continue reading »
Bulgaria’s under-fire central bank has turned to the European Central Bank to oversee the country’s financial system days after it announced that it would allow the country’s fourth-biggest lender to collapse.
Bulgaria’s banking system as a whole remains well-capitalised. But the Bulgarian National Bank’s decision to enter talks with the ECB about joining the joining the European Single Supervisory Mechanism (SSM), even though Bulgaria is not in the eurozone, is an admission of draining confidence in the country’s financial and political authorities. Continue reading »
If EM investors were looking for a trigger for volatility, this must surely fit the bill. The downing of flight MH17, whoever is found to be responsible, appears certain to cause an escalation of geopolitical tensions already at a high level over Gaza, Iraq, Syria and Ukraine itself. Investors, whose attention has been focussed almost exclusively on the US Federal Reserve and the prospect of rising interest rates, must surely now put more political risk into their calculations.
But look at the reaction on markets and you have to conclude: not a bit of it. Continue reading »
By Akshay Mathur, Gateway House: Indian Council on Global Relations
The New Development Bank launched this week in Brazil by the leaders of the Brics countries – Brazil, Russia, India, China and South Africa – is to boost infrastructure and sustainable development projects through loans, guarantees, credits and equity investments.
But the bank’s establishment also enhances another key geoeconomic ambition of the Brics: to conduct more trade in local currencies, thereby diluting the dominance of the US dollar. Already, there is plenty of evidence to underscore the vitality of this ambition. Continue reading »